Former KBR Worker Admits to Fraud in Iraq
Tuesday, August 23, 2005
A former worker for a Halliburton Co. subsidiary faces up to 20 years in prison and a fine of as much as $1.25 million after pleading guilty late last week to taking kickbacks in Iraq in a scheme that defrauded the U.S. government, court records show.
It marks the second case this year of a Halliburton worker facing criminal charges in connection with the company's work in Iraq.
Glenn Allen Powell, who pleaded guilty on Friday in U.S. District Court in Rock Island, Ill., was employed by Halliburton subsidiary Kellogg Brown & Root Inc. in Iraq from October 2003 until January 2005. During that time, he admitted to taking 20 percent off the top of a subcontract, or more than $110,000.
The fraud came as part of KBR's work on a multibillion-dollar Army contract to provide logistical support to U.S. troops worldwide, including in Iraq. According to the plea agreement, Powell accepted kickbacks from an Iraqi business that had won a job to help renovate four buildings in Iraq for office and warehouse space.
Powell's fraud was discovered in January when KBR investigators searched Powell's residence in Baghdad and found large amounts of cash, including $8,000 worth of $100 bills stuffed in a jacket pocket, $1,580 on top of the refrigerator and about $3,500 worth of Iraqi dinars in the top shelf of a dresser, the court papers said.
KBR then fired Powell, and he returned to the United States.
While the scheme was ongoing, KBR had been unwittingly billing the U.S. government an inflated amount for reimbursement because of the 20 percent kickback. The difference has since been refunded.
"When the issue was discovered, KBR removed the company in question from consideration for any future work as a subcontractor," Halliburton spokeswoman Cathy G. Mann said in a statement. "KBR also issued the government a credit for the amount of the improper payment. Halliburton and KBR take any charges of improper conduct seriously, and we expect the same standard of impeccable ethics from every person and every company with which we do business."
In March, a former KBR manager named Jeff Alex Mazon was charged in an indictment with defrauding the U.S. government of nearly $4 million by inflating the price of fuel tankers for military operations. He is accused of taking $1 million from a subcontractor. In that case, too, federal prosecutors began to investigate after an internal KBR investigation uncovered evidence of wrongdoing.
Halliburton's Mann said the cases are not related. Halliburton is the Pentagon's largest contractor in Iraq. Its work has come under scrutiny in part because Vice President Cheney was the firm's chief executive between 1995 and 2000. Halliburton and the Pentagon deny the firm receives favorable treatment.